Memorial back in black first time in five years

Memorial Health, mother corporation for Memorial University Medical Center, last year finished in the black for the first time since 2006, posting a $29.1 million turnaround from the previous year, President/CEO Maggie Gill reported Thursday.

Audited financials completed in April by Atlanta-based accountants Dixon, Hughes, Goodman LLP showed system operating income of $1.5 million and system net income of $4.8 million, Gill said.

That was based on $565 million in system revenues — a slight increase over $563 million the year before — and included $2.6 million in investments.

The figures include the medical center which accounts for 88 percent of the total revenues for the system.

It reversed 2010 when system operating income was a negative $27.5 million and negative $16.5 million in net income, including $11.9 million in investments.

The turnaround occurred during Gill’s first year as head of the region’s largest health-care provider and “to the penny” of Gill’s projections in February while awaiting the completed audits.

Gill credits several issues for the turnaround.

“I think it is a combination of having a good understanding of the business, a strong relationship with the physicians and team members and having a financial background,” said Gill, a former chief operating officer since joining Memorial in 2004.

“It is understanding who you are as an organization, focusing on business practices that will ensure viability and sustainability and treating patients and physicians like your customers.”

Memorial’s tradition of good patient care has been a positive.

“I’m very fortunate that Memorial has a strong history of quality health care,” she said. “It makes it easy to build upon a strong foundation.”

And the intangible — “You also have to care about the place,” Gill said. “I consider Memorial to be part of my family and I treat it as such.”

But Gill refused to take full credit for the turnaround.

“There is no one person who turns it around by her or himself,” she said, deflecting credit to “good leaders who make good business decisions, focus on the patients and have the tools to do the job.”

Gill was named interim president/CEO in January 2011, replacing the ousted Phillip Schaengold and inheriting the on-going red ink in operating loss.

She became president/CEO in April 2011, with a vow to restore financial and personnel stability while at the same time keeping Memorial true to its mission.

Gill’s predecessors Robert “Bob” Colvin and Schaengold fell victim to bottom-line red ink and, in Schaengold’s case, a fragile relationship with the system’s physicians, which translated into problems with the hospital’s board of directors.

Gill credits her repaired relationships with the hospital’s physicians are among the positives in her first year.

Dr. Stephen Morris, a pulmonary critical care physician and a veteran of 30 years with the institution, said his colleagues are “very pleased with the leadership right now.”

Morris also is president of Memorial’s 100-member Physicians Practice Group of primary care and specialists.

“It’s a bad time for health care, an uneasy time,” Morris said, referring to changes coming out of Washington, D.C. that often keep providers guessing at what’s next.

Gill “has a great feel for the institution and the needs,” he said. adding she “listens, asks questions and gives you appropriate responses.”

He called her a great communicator, whose business background allows her to “question numbers when they don’t make sense.”

“It makes a difference,” he added.

Curtis Lewis III, an attorney and businessman now in his second year as Memorial’s board chair, said he is very pleased with Gill’s job of managing the whole hospital system over the past year and a half.

He credits her discovery of “some areas of the business of the hospital that had not been focused on before” for her faster-than-expected turnaround.

“There were problems in the revenue cycle that the board had not been made aware of” before Gill and her team addressed them, Lewis said. “She has put together a team that I think will lead the hospital to bigger and brighter things in the future.”

When she took the helm in January 2011, Gill immediately made sweeping changes in and shifted the systems’ focus to improving revenue.

In May 2011 Memorial brought in Conifer Health Solutions Inc. to increase revenues, with full integration of the systems in September. She renegotiated Memorial’s Medicaid contracts with two providers.

Most recently, Gill worked with Memorial Health’s board and Chatham County Hospital Authorityto get the Chatham County Commission to guarantee about $164 million in bonds so that the private health care provider can refinance its debt and free up funds for infrastructure improvements.

That refinance will complete its final stage on May 29.

But good news in 2011 does not necessarily translate into smooth sailing down the road.

“Our margins are dangerously thin,” Gill said, noting that despite more than a half billion in revenues, operating income was only $1.5 million last year. “That’s still too thin for me to sleep at night.”

Hospitals are still trying to figure out the changes coming from the national health-care reform. Medicare and Medicaid reimbursements are expected to continue to experience reductions.

“We must find new ways to grow revenues, contain costs and grow the revenues in a responsible manner,” Gill said. “All the initiatives will preserve the organization to maintain its mission.”

She concedes the 2011 year-end numbers will be difficult to repeat, setting her sights on a more modest $2 million operating income and $5-$6 million net income in 2012.

When she took the helm last year, Gill said she thought she would still be facing a $10-$15 million loss for the year.

“I’m extremely pleased at the progress we’ve made in the first year,” she said with a wide smile.